By JAMES WALLACE, P-I AEROSPACE REPORTER

Published 10:00 pm, Wednesday, January 30, 2008

The Boeing Co. provided few fresh details Wednesday about the status of its 787 Dreamliner program, other than to say it is keeping to a revised schedule that should see first flight around the end of June, some 10 months late.

Initial deliveries are expected in early 2009.

Boeing is talking with its 787 customers, partners and suppliers about this revised delivery schedule and the upcoming flight test program, as well as what progress those partners are making in meeting their commitments to deliver to Boeing more-complete Dreamliner assemblies.

Boeing will disclose the results of this overall 787 program assessment in April when it reports on first-quarter earnings, Chairman and Chief Executive Jim McNerney said during a conference call with analysts and the media about Boeing's fourth-quarter and 2007 financial results.

The numbers were better than Wall Street expected.

On the strength of more jetliner deliveries, defense earnings and companywide productivity improvements, Boeing said its net income increased 84 percent in 2007 to a record $4.1 billion, or $5.28 a share, up from $2.2 billion, or $2.85 a share, in 2006.

Earnings for the fourth quarter rose 4 percent to $1 billion, or $1.36 a share, up from $989 million a year ago.

Analysts polled by Thomson Financial had expected, on average, that Boeing would earn $1.32 a share on revenue of $17.3 billion. Boeing's revenue for the quarter was $17.48 billion, down slightly from a year ago.

In Boeing's commercial airplanes business, earnings from operations rose 46 percent to $973 million in the fourth quarter, up from $665 million a year ago. Revenue increased 17 percent to $8.9 billion in the quarter as deliveries rose 9 percent to 112 planes and the aviation services business continued to grow.

Commercial margins rose to 11 percent, up more than 2 percent from the fourth quarter of last year.

But Boeing reduced its estimate for 2008 revenue and jetliner deliveries because of the 787 delays. The company said it would provide 2009 guidance when it issues first-quarter results in late April.

Boeing lowered its 2008 revenue guidance to $67 billion to $68 billion. That's down from its previous forecast of $67.5 billion to $68.5 billion.

The company will deliver 475 to 480 jetliners this year, the result of pushing 787 deliveries into 2009. Boeing previously had said it expected to deliver 480 to 490 jets.

Although investors reacted to the financial report by sending Boeing shares up $1.91, to $82.89, some analysts were hoping to hear more details Wednesday about the 787.

"There was nothing particularly new for anxious investors to glean on the 787 program," Robert Stallard, an analyst with Banc of America Securities in New York, wrote in a note to clients.

Overall, Boeing's financial numbers were "very good," said Paul Nisbet of JSA Research in Newport, R.I. "They have fallen into the habit of reporting slightly better results than their guidance," Nisbet said.

But he was disappointed that Boeing did not provide more specifics about the 787, especially about a key program milestone known as "power on." This is when most of the 787 systems will have been installed and the plane's internal power can be turned on.

Boeing said earlier this month, in announcing the latest three-month 787 delay, that "power on" had slipped from late January until perhaps late March.

"I would have liked to have heard more about when they expect to power up the 787," Nisbet said in an interview.

McNerney did say Boeing is working closely with its partners to make sure that there are no more major surprises that could cause further delays.

Boeing has deployed 50 to 130 of its own people with each of its global partners, he said, working "hand in hand, minute by minute, hour by hour, 24/7."

Boeing's partners in Italy, Japan and elsewhere in the United States are responsible for manufacturing much of the 787 structure, including wings and fuselage. But they stumbled early on. Their spotty performance, coupled with parts shortages from various suppliers, has slowed work on the first test plane in final assembly at Boeing's Everett plant. That forced Boeing to delay first flight and also delay deliveries of the first Dreamliners from May of this year to early 2009.

In response to a question, McNerney said Boeing has no plans to drop any suppliers or partners because of poor performance. But it's possible that some 787 work might occasionally be shifted among suppliers, he added.

On other matters, McNerney said:

Boeing is in talks with around 10 customers about the passenger version of the 747-8, and he would "not be surprised" if one or more order the plane this year. So far, only Lufthansa has ordered the 747-8 passenger plane, though the freighter version has been selling well.

Boeing feels no need to respond just yet to the planned Airbus A350-1000, which Airbus is targeting at the 777-300ER. Boeing has said it will probably need to improve the 777-300ER to make it more competitive against the A350-1000. But the Airbus jet won't be ready for airlines until around 2015, so Boeing has time.

"I would not expect to see a major Boeing program until after this year," McNerney said.

The current industry cycle should continue to be robust for several more years. U.S. airlines need new, more fuel-efficient jets, and some could start to order planes this year.

Boeing has the ability at its Renton plant to further boost production rates of its hot-selling 737 and may do so, but that has not been decided.

Even though Boeing's corporate offices are in Chicago, not Seattle, McNerney said he is closely involved in what's happening with the 787.

"I'm more involved now. Part of my job is to get involved when help is needed and that's been the case with the 787 over the past two months."